4 Things You Must Do to Retire Early
When I first started reading about early retirement I couldn’t stop. Mr. Money Mustache who has become the Michael Jordan of early retirement,makes it sound easy because for him it was. MMM had the DIY/Frugal/Save Money/Badassity pumping through his veins early on so leasing a Range Rover, buying the HD Premier cable package, or buying the million dollar house on the block didn’t really occur to him as a need or want like so many of us today. Putting it simple he didn’t want to be a rap superstar and live large, a big house, 5 cars, he just wanted to be in charge and retire early. One thing that many of us including myself completely miss when we hear early retirement is the details. All we hear is retire early, then our minds shift to not working in the Cubicle or Action Office as I found out, quitting the daily commute where road rage or getting close to the sweaty guy on the train is the norm, maybe you think of a hammock and Corona or maybe you dream of your last day wearing shorts and a Hawaiian shirt, because all you can think of is f*** this place, I’m out or like the kids are saying “Dueces”, but I think it’s pretty safe to say we skip over the 4 things You Must Do to Retire Early. Buckle up and put on our helmet’s.
- Stop Spending F***ing Money. I curse for emphasis, Mrs. Even Steven says I should stop, but now “Stop Spending Money” has been emphasized. You cannot create any more debt so if you think putting your vacation on your credit card that you will pay down over the next 18 months is a good idea for early retirement you my friend are a moron. You cannot buy a new car because that will put you in debt and yep we would go back to the you my friend are a moron. I hope I’m being clear not only for myself but for everyone. Yes I want the new 70 inch plasma TV to watch the NFL every Sunday, but you know what, buying that would make me a moron because I would go into debt. If you think any of these things will help you retire early, read the first
step until change your mind.
- Know Where Your Money is Going. See less emphasis because I didn’t curse. I’m not even sure if you are reading anymore. Know Where Your F***ing Money is going. OK everyone is back on board with me. Unless you are some magical wizard, you know what forget that, even if you are a magical wizard you must know where your money is going, here’s why: you might be spending too much, you might have a $500 car payment, you might have an addiction to Starbucks(aka the Evil Empire), who knows you might spend all of your money on beanie babies like Elvis over here thinking they are just to adorable or it’s your investment in the future. The point is there is a lot of “You Might” which means you have no clue. If you want to retire early you must know where your money is going. You can create a budget by hand or on excel(I’m a nerd so this is fun), use some online tools like Mint or Personal Capital which seems to be the most common out there.
- You Have to Pay off Your Evil ManBear of Debt. I found a work around for emphasis, no idea what a Manbear is but I have a couple ideas in my head and it’s scary. Here’s where I get caught up the most. I want to retire early, like yesterday, I want the process to speed up, I want to invest in stocks, bonds, index funds, oil, gold, my nieces lemonade stand, real estate, bit-coin, beanie babies, and swamp land in Florida. The problem is the Evil Manbear in the room, debt. Pay off your credit cards, student loans, medical debt, parents loan, the dollar you borrowed from the guy at work, the car or monster truck loan, mortgage/investment property(big debate in the personal finance world, but hey MMM our golden boy of retire early paid his home off). This is just the way it works you need your income to be greater than your expenses by a lot, not I put $100/month in my savings, more like 50%-99% of your income into savings and investment, my preference is my nieces lemonade stand, but there may be better options. Which leads me to number four in no direct way at all, how’s that for a transition…… my high school English teacher would be proud.
- Cut Your Ever-living Expenses. No cursing needed once again, thanks urbandictionary for the help on not cursing and possibly for my misuse of the word ever-living. This combines all of your efforts from the previous steps. We are not all MMM or the Arnold Schwarzenegger of retiring early and defeating all odds, we have debt. Student loans, credit cards, mortgages and car loans are some of the biggest obstacles, but don’t forget we are cutting our ever-living expenses all of them, because we are not “Girly Men” sorry ladies I don’t think Arnold had a classic saying like Girly Men for the ladies, if he did please tell me in the comments and I will include it. So we are taking drastic measures to cut our expenses. What do you mean drastic, like not getting my mani/pedi this weekend? Drastic……..Sell your car and walk, bike, bus, train, car pool, hitch hike, jet pack, and my personal favorite Kolelinio to work. OK now that we are taking the zip line to work and saving some cash what else is drastic. Cut cable and the HD Premier Package because we do not need every single premium channel out there that is just ridiculous. If you love movies go the library and get them they are free, ask a friend they probably have something you can watch, hey crazy idea cut cable and keep the internet and you still will have 3 million things to watch. OK even crazier idea get the gosh darn out of your house, I’m clearly getting soft with this gosh darn talk. Yeah check out the park, lake, ocean, forest, mountains, hills, trees, I don’t care just get outside it’s free to be outside, God Bless America. Great spot to end but I’m way more caffeinated than I should be. More drastic, cut your cell phone bill, but I hear people say I need my Apple phone and my contract is for another 13 years and I call my friends and use the internet to search for beanie babies every day and guess what? This is not a need, not if you want to retire early. There are options out there anything from no cell phone to simply cutting back. I’ll write about that another time. Little victories now become huge Manbear victories, that’s right the Manbear is now your friend and can be used at your discretion to defeat debt and the fun part of the early retirement journey, invest and save BIG, Manbear big!
- Wait you said 4 Things. The Title Is 4 Things You Must Do to Retire Early, this is #5 and I now I hear the audience start to think I am a moron and worry about the previous 4 steps being legitimate. I want you to think of step #5 like the hidden track on a CD you just bought because you listened to all of the songs and the band decided to reward you with something great and put a “secret track” aka #5 on our CD and since you kept reading you came across the best tip of them all. If you have never heard of such a thing you were probably born in the 90’s and have never heard of Saved By the Bell either, I liked Lisa better than Kelly for those who care.
OK #5, big hidden song, and tip #5. Save and Earn more money than you currently are. One of these must happen and if you are on the Even Steven Money plan of retiring early you are doing both. The more you earn the more you can save, the more you save the faster you can retire. I promised myself I wasn’t going to go on a rant about saving and earning more so I won’t, but remember the reason this is a hidden song at the end of the article is because you accomplished the previous 4 steps, that’s when the song comes up when you stop spending, know where your money is going, pay off your debt, and cut your expenses. For those who skipped to the hidden step, go back because in the real world it doesn’t work like that, you don’t just start saving more money because you are the magical wizard of personal finance and money. These things need to be done, so go back read the steps, make sure you can cross them off your list before getting to the hidden step #5 because that’s what makes the last step so great it’s because you went through the journey of not being a moron, beanie babies, Manbears, and Girly men.